Change Management – I’m Tired of Culture

Say What????

What is culture?  I read a lot about it these days, particularly as a barrier to implementing change.  Culture has become a curmudgeon.  A general consensus has developed that solving “the way we do things around here” will bring implementation bliss to change management.

My only problem is that the more I read about culture the less I know what to do about it.  It seems that we’re happy defining the problem without giving the specifics of a solution.  Why wake a sleeping dog?

Come on – we’ve got to do better than that.  It’s time that we parsed culture into its essential elements and then offered up ways to change it?  We all know the elements – they’re common to any change readiness assessment. 

Management factors, such as:

• Organization design – with roles & responsibilities
• Planning processes – from strategic through business plans to projects
• Reporting & Measurement systems – for operations & programs
• Reward schemes – for compensation & recognition
• Procedures, processes, & controls

Leadership factors, such as: 

• Setting a vision
• Inspiring the passion in all employees
• Communicating authentically & transparently

You can make up your own list but at the end of the day isn’t that the definition of “culture.”  Doesn’t that describe, “how we do things around here?”  Aren’t these the things we’re trying to change so that an organization can alter or accelerate the path that it’s on?

Here’s an example.  Several years ago I was working at Whirlpool, a great company with many great brands; however, at the time resource power & control rested in the vertical operations – those who designed, manufactured, distributed, and sold the durable appliances.  Brand managers worked horizontally to influence changes across these verticals.

For many months my team worked with the Kitchen-Aid brand to develop ideas for product innovations and enhanced customer experiences.  We were neck deep in great ideas & little results.  Efforts at implementation veered off course and generally withered.  At the heart of the problem was Whirlpool’s refined and efficient planning process.  There was a drumbeat that was known and obeyed by all.  Culture was eating change.

Once we figured out that planning was a barrier to innovation the executive team agreed that we could work with the finance & planning people to redesign the planning system.  It took close to a year and involved things such as:

• New mandates for planning sub-teams to make them more diverse & distribute decision make power
• Criteria to get change initiatives out of the regular flow of decision making and monitoring
• Detailed revision of forms that drove the process

In essence we needed to change the rules of the game if we were going to change resource allocation decision.  Culture wasn’t the problem, the disciplined legacy planning process was.

I believe it’s time to expunge the “culture” word for change management.  If change isn’t happening we need to disaggregate “how things are done,” roll-up our sleeves and change the rules of the game.

Korea: Psychotic Gangnam Style

"Where did these cars come from?"

Gangnam Style.  49,000,000 hits on YouTube!  Have you seen it?  It’s psychotic.  It’s the new Korean pop (K-pop) music video by Psy (short for Psychotic) that parodies the lifestyle in Gangnam (the most chic district of Seoul, South Korea).

I worked in Korea for 26 months.  Our team worked to transform one of Korea’s largest public companies.  We used innovation as a lever to engage employees and open the organization to new possibilities.  The more I understood what was happening outside our office the more effective I became inside. 

Gangnam Style lays open the schizophrenic culture of Korea.

I don’t claim to be an expert in interpreting Gangnam Stlye.  There are many others who have done this.  What I do see is that Psy is bringing out the vast cultural under currents in Korea.  For example, the video opens with him playing on a beach, which turns out to be a children’s sand box.  This is interpreted as a caricature of life in Gangnam where material excess is nothing more than a hollow imitation of hollow lives.

Psy has a point.  I have worked in most regions of the globe and I can’t think of a country with as much internal turmoil as Korea; turmoil that could explode.  Let’s take a brief look at modern Korea.

In 1960 the average per capita income of Koreans was $100.  Today (although I see lots of different figures) that number is in the range of $30,000 – compare that to something like $40,000 in the US.  The exact figures aren’t important.  What is important is the rocketing economic growth that took place in Korea over just a few decades.  The most accelerated time of growth was 1960 to 1997 – this is known as the Miracle on the Han (the river that runs through Seoul and much of the country).  Since 2000 the Korean economy has had steady annual growth - in the 2% to 4% range.  Korea is now the 15^th largest economy in the world.

Just think of what this exceptional economic growth means to this country of 48,000,000 people and the impact it is having on a country that is now experiencing aging at a pace that is unprecedented in human history.  The percentage of Koreans 65 (born in 1947 or earlier) and above has sharply risen from 3.3% in 1955 to 10.7% in 2009.  Korea's population shape has changed from a pyramid in the 1990’s to a diamond in 2010.  The top of the diamond is an aging class that knows starvation and poverty coming out of the Korean War; the young class knows prosperity and the materialism of the west; people torn between these two worlds populate the middle of the diamond.

Although the middle is torn, it is also the layer that keeps the country politically stable and economically prosperous.  Above them are their parents who rarely greet their peers with: “How are you?”  It’s more likely that they ask, “Did you eat today?”  The parents are steeped in the teachings of Confucius with its hierarchy of respect and deference flowing from king to teacher to father.

Below the middle are the youth.  This is a wholly brand conscious, hip layer that is rejecting the past.  They see that their parents and other elders have sacrificed but now the young want to benefit from the prosperity of the nation.   Big shifts are evident in the attitudes of women who are well educated, have good jobs, and resist giving up Zara and Gucci for marriage and children.  Oh yes, obesity is becoming an issue as abundance and western food chains hit the streets.

The people in the middle recognize the strictness of the past.  They want to tone down the education system where scholastic high school seniors study 18 hours a day 7 days a week.  They also recognize that deference to the ideas and traditions of their elders is not progressive.  This is an anachronistic society.  The middle has to tie together kimchi (vegetables marinated underground for a year) and street carts with bullet trains and 103% penetration of cell phones.

So, when I see Psy in his energetic gyrations I see someone who is channeling the undercurrents in his country.

Where’s it going?  I don’t know.  The top of the diamond is stifling; the bottom of the diamond is unstable; the middle is getting tired of the straddle.  Soon Korea will need another Miracle on the Han.

Oh well, don’t worry; be happy; watch Gagnam Style.

5 Things I Really Believe About Change Management

Organizations are in constant need of changing what they do and how they do it.  

There is a generally accepted formula for change managememt that includes steps such as:

• Setting a compelling vision
• Chartering teams: executive sponsors, project teams, issue teams
• Communicating to increase awareness
• Getting short term wins to maintain momentum
• measuring results
• Integrating changes into the way that business is done

Ok, we all agree on this, but what’s underneath successful transformations?  What do we really believe?  What levers do we push when the change stalls?

Well, I’ve asked myself these questions and I’ve reviewed my work over the last decade.  I found there are some things deep inside of me that I believe.  I consolidated these into five core beliefs.  Here they are in shorthand to increase readability.  

    1.    Change Is A Function Of Resources: 

Change does not happen through good will.  Change is directly related to the amount and intensity of resources applied to it.  The corollary is that an organization’s immune system cannot fight concentrated resources.

To disrupt organizational inertia you need to dedicate resources outside the normal rhythm of the business.  Don’t “repurpose” resources and don’t let subordinate managers control change budgets.

Transformation requires that leaders make different decisions.  This can't happen with the resource allocation rules that are designed to protect the ongoing business.

2. Don’t Fight The Organization's DNA:  

Companies are successful because they have a DNA, a culture.  You need to understand this DNA if you expect to change the organization.  You need to know what the organization can be; not what it wants to be.

IBM transformed by selling off what it was and buying what it wanted to be.   That’s a great strategy if you have the leadership, resources, perseverance, and commitment to pull it off.  Most organizations don't.  Doing the “adjacent possible” is more realistic than “making the impossible, possible.”

Work on the right changes, not those driven by ego.  

3. Poke Someone In The Eye:  

The worst words in the transformation business are: integration, collaboration, and cooperation.  These are words of passive resistance.  You’re about to be coopted.

I'm not advocating nastiness, but I am advocating “discomfort.”  If people are comfortable they’re not thinking; if they’re not thinking they are not changing.

Leading change is tough work.  You must be an irritant - even if that puts you at risk.

4. Managers Resist Change – Not Employees:  

Employees do their jobs until they are clear about the alternative.  Not so for managers.  Managers are vested in the status quo.  They enforce rules that ensure: efficiency, consistency, and low risk.  

Sometimes “change management” comes down to “change – management.”  In reality many transformations rely on cycling people out of the middle of the organization to allow those with untainted ideas to rise and participate.

Move quickly on resisters.  Removing a band-aid involves the same amount of pain whether you rip it off quickly or peel it off slowly.

5. Change Is Not A Journey:  

It fascinates me that we tell clients that change is accelerating exponentially.  In the next breath we tell them that transformation is a long journey and not to expect short term results.  You’ve got to be kidding?

We need to prove ourselves everyday by contributing to: new and incremental revenues, increased customer loyalty, and improvements in the cost structure.  

If you're not providing value everyday then you become part of the furniture.  You’ll be eliminated as executives become fatigued.

So, there you have it.  Those are the core beliefs that drive me when consulting on organization transformation.

However, as my mentor used to say: “that’s just my opinion, I could be wrong.”

What do you believe drives organization transformation?